Kadmon Holdings Inc (NYSE:KDMN) Is Attracting Some Of Biotech's Biggest Names

Third Point, the fund run by Dan Loeb, just filed a purchase that saw the company pick up 1.48 million shares of Kadmon Holdings Inc (NYSE:KDMN) for $3.36 a piece. The buy brings Third Point's total position to just shy of 10 million shares, making the fund the largest stakeholder. Dan Loeb and Third Point need no introduction here, but the most interesting part is that Loeb is not the only big name loading up on this relatively under the radar biotech play. Joseph Edelmen (through Perceptive), Steve Cohen (through Point72) and Edward Mule (through Silver Point) all have a position in Kadmon. Millennium Management rounds off the list.So this is a biotech with a market cap of less than $190 million, and no approved assets, which has a backers list that reads like a who's who of the biotechnology and healthcare investment space.What are they seeing that markets, to date at least, have missed?Well, quite a lot.Kadman is developing three different drugs across a scope of target indications, many of which have the potential to offer the company exposure to a billion dollar plus market. Two of these assets are in no less than six ongoing phase II studies, and – and here's what makes this one so interesting right now – three of these phase II studies (and one phase I study) are expected to read out between now and the end of the year.Throw in a couple of planned study initiations, and some conference presentations, and there's enough activity scheduled for next six to nine months to get this trading at a strong multiple of its current PPS – assuming the catalysts hit press in favor of development progression.So what are we looking at specifically?The two drugs in focus are KD025 and Tesevatinib. The former is what's called a ROCK2 inhibitor; it downregulates Rho-associated kinase 2, which is a kinase that plays a key role in cell shape and structure, serving as a sort of skeletal type element. The latter is a tyrosine kinase inhibitor, which also inhibits VEGFR2, HER2 and Src family kinases. Inhibition of these growth factors and kinases can induce apoptosis in cells, and therein lies the MOA.Both of these drugs are in the above mentioned phase II development stage, with KD025 in ongoing trials for psoriasis, Idiopathic Pulmonary Fibrosis (IPF) and Chronic Graft-Versus-Host Disease (cGVHD), and Tesevatinib in under investigation in NSCLC with Brain Metastases or Leptomeningeal Disease, Glioblastoma, and a types of kidney disease called Autosomal Dominant Polycystic Kidney Disease (ADPKD). It's also in a phase I study for a different (but closely linked) type of kidney disease called Autosomal Recessive Polycystic Kidney Disease (ARPKD).All three of the KD025 phase IIs are expected to read out during the fourth quarter of 2017, and all headed into the current trials on the back of some strong safety and efficacy data collected as part of phase I investigations.The phase I in the above mentioned ARPKD is also set to read out before the end of the fourth quarter.With the 025 trials all set to read out before the end of the year, these are our primary focus catalysts near to medium term. The MOA of a drug like this is highly applicable, in the sense that it can (theoretically) work in a wide range of different indications. As such, if these three studies suggest clinical benefit, the implications of the suggestion extend far beyond the psoriasis, IPF and GVHD market.With that said, these three markets are potential blockbusters on their own, with each (and this seems to be a theme across Kadman's target indication range) having some form of approved therapy already, but with said therapy having associated with it some pretty undesirable side effects.There's also an ANDA in the wings for a condition called Wilson’s disease, which is essentially the company's attempt to start generating revenues on a generic asset. It's not going to be a game changer if it gets a regulatory green light, but there's some decent upside potential nonetheless on the reporting of an FDA nod.A $23 million financing that closed on March 13 removed any near term dilutive risk.We will be updating our subscribers as soon as we know more. For the latest updates on KDMN, sign up below!Disclosure: We have no position in KDMN and have not been compensated for this article.